The accommodative stance of monetary policy remains essential

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Christine Lagarde, president of the European Central Bank (ECB), told the European Parliament on Monday that inflation in the euro zone remains low despite the sharp rise in January due to a confluence of factors, Reuters reported.

Additional conclusions

“If implemented as planned, the next-generation EU could even drive growth this year.”

“A stronger recovery is a precondition for re-anchoring inflation on its pre-pandemic path.”

“The accommodative stance of monetary policy remains essential.”

“While we expect headline inflation to rise further in the coming months, underlying pressures on prices are likely to remain subdued.”

Market reaction

The pair EUR/USD It was down after these comments and was last seen shedding 0.05% on the day at 1.2037.

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